Trade activity around Ethereum, the second largest cryptocurrency by market cap, has intensified in recent times ever since the date for Shanghai Upgrade which will be a hard fork is announced. This will be the protocol's first major upgrade since 'The Merge' in 2022.
The network upgrade, which was earlier scheduled for March 2023, is rescheduled after the recent Goerli testnet launch. The core developers of Ethereum are aiming for April 12 for the Shanghai hard fork mainnet launch.
The Shanghai upgrade will let holders of ether (ETH), Ethereum's native token unstake the assets for the first time, giving them greater access to their holdings. Basically, the event will result in transfer of previous stakes Ether token at the time of the Merge, for trading purpose.
The Ethereum developer Tim Beiko announced the launch date for the Shanghai hard fork (also known as Shapella) in a live stream of Execution Layer Meeting 156. The team aims to get Shanghai on the mainnet on epoch 620,9536 after it passes the developers voting on GitHub.
It is necessary to understand that ‘the Merge’ activity carried out earlier was nothing but a process through which the Ethereum network changed its consensus mechanism from Proof-of-Work (PoW) to Proof-of-Stake (PoS). Here, the aim was to improve the network’s long-term scalability, security and sustainability.
The merge involved swapping out Ethereum’s PoW consensus method with PoS. However, post the Merge any Ether token that an investor staked including accrued staking rewards remained locked on the Beacon Chain without the ability to withdraw.
To enable withdrawal the Ether required to undergo an upgrade, which is Shanghai upgrade, the next major upgrade following The Merge.
The newly issued Ether after the Merge, and were accumulated on the Beacon Chain, remain locked and illiquid for more than 12 months.
Meanwhile, the hard forks are considered as dangerous because of the chain split that often occurs. If a split occurs between the miners who secure the network and the nodes that help validate transactions, the network itself becomes less secure and more vulnerable to attacks.
Interestingly, the recent Goerli testnet was hard forked but received low developers’ participation. But the mainnet launch is expected to go smoothly, unlike the Goerli testnet.
Considering the anxious investor wait for more than two years, the withdrawal pressure may result in increased rate of dump. The fear of markets flooded with Ether token impacting price will be very high.
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